Uncle Sam recently offered America’s hardworking taxpayers a helpful “tip” to ensure that the IRS gets paid next year. Even if you were sitting around wondering, “When would be a good time to set up a system to organize my tax records?” the IRS’ answer probably won’t shock you: the time is “now.”
It’s actually not the worst advice, but “because they said” isn’t the main reason you should start planning ahead for next year’s filing.
The #1 reason to start now rather than later is a matter of basic psychology: procrastination is linked to higher levels of anxiety and depression, whereas planning ahead and taking early steps toward a future goal have the opposite effect.
Be a Manager
In business, management requires planning. Someone has to do the legwork to make the calls, find the clients, set the goals, and see the big picture. In personal as well as company finances, be your own manager. Look ahead, make a goal, and take steps to achieve it. If you’re looking to reduce your taxable income, start taking steps now to increase retirement account investments. If you want to be sure to deduct all education loan interest, get an idea now about how that will affect your filing next year.
It may be cliched, but that doesn’t make it untrue (which is probably why cliches are so universal): take small steps. If you’ve had tax trouble in the past, sit down and seriously analyst your projected financial status for the year. Then adjust your withholdings accordingly to avoid any surprises come next April.
Pick a Place for Records
Organization is one of the biggest hurdles to last-minute tax preparation. One five-dollar accordion file can save you a ton of time, not to mention the frustration of randomly rummaging through the house looking for Social Security cards, rental agreements, mortgage interest records and more. Nip this problem before it becomes one, and pick a place to save everything that might be needed for taxes.
Hire a Professional
If you’d just rather avoid the hassle next year, shop around for a CPA. We hope you’ll start with us. At Foster Financial, we pride ourselves on professionalism, responsiveness, and quality. Check out more tips or contact us today to learn how we can help you make tax season 2019 as anxiety free as possible!
Tax Tips for the Self-Employed
How the SECURE Act Impacts Small Business Owners
What You Need to Know About the QBI Deduction
Do You Need to Send Out 1099s?
Checklist for Maintaining Your Limited Liability: Avoiding Piercing the Corporate Veil
Why Small Businesses Need a CPA